The Mahindra Group is looking to acquire a strategic stake in RBL Bank and has likely acquired a 4 percent stake in the Mumbai-based private lender, sources with knowledge of the matter told CNBC-TV18.

Share Market Live

NSE

Sources suggest that the Mahindra Group is keen on increasing its stake in RBL Bank if it gets the approvals to be a strategic shareholder of RBL Bank.

“Mahindra Group is excited about synergies with RBL Bank across group entities,” said a source on the condition of anonimity.

These strategic plans of the Mahindra Group are subject to approval from the Reserve Bank of India.

Based on current regulations of the RBI, Industrial houses can hold a maximum 10 percent stake in banks but can't be their promoters. The RBI also does not allow a banking license to an industrial house. The Mahindra Group may apply for a dispensation from the RBI, according to a source.

Mahindra Group’s bet on financial services sector is primarily through the group company Mahindra & Mahindra Financial Services. Both Mahindra Group and RBL Bank did not offer a comment to CNBC-TV18's queries.

RBL Bank has had a bumpy last few years with Vishwavir Ahuja stepping down as MD & CEO to the Reserve Bank of India appointing its own official on the board in December 2021. The sudden exit and RBI's actions had put the private lender under the lens over its financial and asset quality strength.

However, shares of RBL Bank have risen nearly 2.5 times over the last 12 months.

A source from investor community said, “We sense that the regulator is looking for a long term solution for RBL Bank.”

Gopal Jain and Sivakumar Gopalan were appointed as non-executive directors in August 2022. Barings Asia owns a 10 percent stake in RBL Bank, while other investors include Gaja Capital and CDC.

Shares of RBL Bank ended 7.2 percent higher at Rs 239.40. The stock ended at a 52-week high.

First Published:Jul 26, 2023 12:12 PM IST